Government vs the market: win/lose or win/win?

One of the great benefits of the market is that it creates win/win opportunities. When 2 people make a voluntary exchange, both expect to be better off afterwards.

Governments, on the other hand, create win/lose opportunities. Through coercion, they force involuntary exchange. At best, if they exchange would have happened regardless of government action, government has wasted resources trying to force a transaction that would have taken place. The loser in this best case scenario is the taxpayer. The worst case scenario is one in which no party is better off from the transaction.

The most common situation, however, are the win/lose scenarios. These are the ones we hear about the government triumph. The government succeeds in helping one person and the injured party is ignored.

Obamacare is an example of this. Some people are made better off and the government proudly point to this accomplishment. For example, adult children under 26 can remain on their parents' insurance policy. But this is not free. Someone else has to make up the extra cost. So everyone else must pay more and society as a whole must suffer. This cost is not trumpeted. The inefficient redirection of resources is ignored.

Welfare is another example. Recipients of welfare can be pointed to. They are the winners of this policy. Taxpayers as a whole are made worse off. Since welfare programs reduce the cost of failing to keep a steady job, recipients are free to continually fall back into this so-called safety net while the rest of society subsidizes them.

Bail-outs of large firms are a more clear example. Since so many are opposed to bailouts, people clearly see that these companies and their employees are the winners while the rest if society loses. Even worse, since these inefficient firms continue to consume resources, these resources are not reallocated to higher valued used, making society even worse off. 

What about the provision of services? Aren't police and fire services examples of win/win? Since the government is incapable of knowing the correct amount of resources to allocate to these services, resource allocation will be determined either arbitrarily or based in political will. Such services are monopolized by the government and do not face the competition the market would provide that would improve service and reduce costs. These are the loses society faces do to government control of these services.

In ever way, government cannot create win/win scenarios. At best they can only force transactions that would have happened and at worse create lose/lose.